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Ericsson plans SEK 9 bln in cost reductions by 2017

2014-11-13 08:39:00| Telecompaper Headlines

(Telecompaper) Ericsson has unveiled plans for additional cost reductions at its Capital Markets Day. The company said it sees opportunities to reduce costs by around SEK 9 billion by 2017. This is expected to result in restructuring charges of SEK 3-4 billion over the next three years, in addition to the usual SEK 2 billion spent by Ericsson each year on restructuring. Ericsson said around half the savings will come in operating expenses and half in cost of sales. The efficiency measures will primarily relate to five areas: portfolio streamlining and ways of working in R&D; structural enhancements in IS/IT; accelerated service delivery transformation; supply chain efficiencies; and structural efficiency gains in G&A. Savings will include both headcount reductions as well as savings in external costs. Measures will include both new and already initiated actions, such as the discontinuation of the modems operations and savings from the establishment of global ICT centres. CFO Jan Frykhammar said the company's aim is to strengthen the core business, build strength in targeted areas and continue to improve cash flow. 

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